Mozilla says Yahoo never delivered on its search deal and caused Firefox usage to decline — now they're both suing each other

Mozilla counter-sued Yahoo and Oath on Tuesday,
following Yahoo's lawsuit against Mozilla on December
1.

The companies are disputing Mozilla's decision to
replace Yahoo with Google as the default search engine in the
Firefox browser.

Mozilla and Yahoo's search partnershp was supposed to
run through 2019.

Yahoo and Mozilla, the maker of the Firefox web browser, are
embroiled in a legal fight over a 2014 deal that made Yahoo the
default search engine for Firefox users in the US.

The search partnership, which was worth hundreds of millions
of dollars a year and was supposed to run through 2019, was one
of the biggest deals struck by former Yahoo CEO Marissa Mayer and
raised hopes that the pioneering web portal might be able to
revive its business.

But Yahoo has since been acquired by Verizon.
And in the eyes of Mozilla, that was grounds to terminate the
agreement. Mozilla dumped Yahoo as the default search engine
in its new Firefox brower in November, replacing it with
Google.

Now, both companies are suing each other.

"We recently exercised our contractual right to terminate
our agreement with Yahoo based on a number of factors including
doing what’s best for our brand, our effort to provide quality
web search, and the broader content experience for our users,"
Mozilla wrote in a blog post on Tuesday evening.

Mozilla said that Yahoo and Oath, the name of the Verizon
subsidiary that Yahoo now operates under,
sued Mozilla on December 1 on the grounds that it improperly
terminated the agreement. Mozilla hit back on
December 5 with a cross-complaint arguing that it was
protecting its rights to enforce the contract.

In its lawsuit, Mozilla also alleged that Yahoo never
delivered on its promise to invest and continue to improve its
search engine.

"As a result, it was one of the significant factors that
contributed to the decline in Firefox usage. Mozilla's revenue
from Yahoo never met expectations," Mozilla wrote.

Mayer left Yahoo in June when Verizon closed its $4.48
billion acquisition of the company. Yahoo is now part of
Verizon's Oath, which also includes AOL and is helmed by Tim
Armstrong.

Here is Mozilla's full blog post:

Yahoo Holdings and Oathfiled
a complaintagainst Mozilla on December 1, 2017, claiming that
we improperly terminated the agreement between Mozilla and Yahoo.
Today, in response, Mozillafiled
a cross-complaintagainst Yahoo Holdings
and Oath for breach of contract.

While this is a legal matter and much of it is confidential, as
Mozilla, we want to share as much information as we can in the
spirit of our values of openness and transparency.

We will create a wiki page with links to relevant public court
documents – over time we expect to add more content as it becomes
public.

Our official statement on this matter is:

“On December 1, Yahoo Holdings and Oath filed a legal complaint
against Mozilla in Santa Clara County court claiming that we
improperly terminated our agreement. On December 5, Mozilla filed
a cross-complaint seeking to ensure that our rights under our
contract with Yahoo are enforced.

We recently exercised our contractual right to terminate our
agreement with Yahoo based on a number of factors including doing
what’s best for our brand, our effort to provide quality web
search, and the broader content experience for our users.

Immediately following Yahoo’s acquisition, we undertook a
lengthy, multi-month process to seek assurances from Yahoo and
its acquirers with respect to those factors. When it became clear
that continuing to use Yahoo as our default search provider would
have a negative impact on all of the above, we exercised our
contractual right to terminate the agreement and entered into an
agreement with another provider.

The terms of our contract are clear and our post-termination
rights under our contract with Yahoo should continue to be
enforced. We enter into all of our relationships with a shared
goal to deliver a great user experience and further the web as an
open platform. No relationship should end this way – litigation
doesn’t further any goals for the ecosystem. Still, we are proud
of how we conducted our business and product work throughout the
relationship, how we handled the termination of the agreement,
and we are confident in our legal positions.

We remain focused on the recent launch of Firefox Quantum and our
commitment to protecting the internet as a global public
resource, especially at a time when user rights like net
neutrality and privacy are under attack.”